Special Interest

Annuities & Medicaid

Annuities & Medicaid

An immediate annuity provides a mechanism to qualify a person immediately for Medicaid benefits if the person is single and has assets over $2,000. If the applicant is married, and the couple has assets over the community spouse resource allowance of $119,220.00, the annuity payment may be shifted to the well spouse.

The annuity must follow certain requirements and must not be for more than the life expectancy of the applicant. Unfortunately, many people experience annuity salespeople who are unfamiliar with the Medicaid rules and how they relate the Medicaid qualification. In addition, annuities are not for everyone and must be analyzed to see if it is appropriate in your particular situation, these are many factors that should be considered and discussed with your attorney:

The immediate annuity must follow specific Medicaid guidelines in order for it to be considered an exempt asset. Some of these requirements include:

The Annuity must designate the State of Florida as the primary Beneficiary.

The annuity must be immediate and irrevocable,

The annuity must be actuarially sound and must be for a term less than the annuitant's life expectancy (as determined under Medicaid Tables),

The annuity must be nonassignable,

For a single person, the income generated by the annuity will be required to be paid to the nursing home.

For a married couple should be established with the well-spouse as the annuitant. The income generated will not count towards the applicant's Medicaid eligibility, but may impact the well-spouse's Minimum Monthly Maintenance Income Allowance.

The income generated may be taxable to some extent.

You lose the accessibility to the underlying principal.

There is no adjustment for inflation or interest changes.

Other factors should be discussed with your attorney as to the underlying law governing inclusion/exclusion, as well as the impact of Florida's Medicaid Estate Recovery program